Vans, not glamorous, but key as EU weighs autos mega-merger

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Their silhouettes don't stir dreams of adventure like a sports car or trendy SUV, but vans are a rare source of profit for European carmakers, which is why EU regulators are focused on them as they decide whether to back an industry mega-merger.

“Commercial vans are important for individuals, SMEs and large companies when it comes to delivering goods or providing services to customers,” European Union competition chief Margrethe Vestager said in a statement, announcing an in-depth investigation into the proposed merger.

Dario Duse, a managing director at consultancy firm AlixPartners, said demand for vans was not based on people’s disposable income, as for cars, but rather on GDP and industrial trends, and in particular the logistics industry, where big players such as Amazon or DHL operate. The light commercial vehicles market may be secondary in terms of volumes, but it remains highly profitable in an industry where margins are constantly under pressure.

“With LCVs you don’t have to fulfil a series of consumer expectations that drive additional complexity and costs, such as for interiors. LCV customers are more rational and business driven,” Duse said.“If we look at the total cost of ownership, which is key for businesses, electric battery vans are already competitive with those with traditional engines,” he added.

 

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